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Competitiveness, Reputation Deliver Higher ‘ROI on Purpose’ Than Consumer Expectations

Image credit: Ketchum/Carol Cone On Purpose

Consumers’ perspectives on corporate social responsibility (CSR) initiatives have received more research attention than the perspectives of manufacturers and retailers, and yet shopper expectations may be a rather minor driver of such initiatives. According to a new study from communications firm Ketchum in partnership with Carol Cone On Purpose (CCOP) consumer demand is actually the sixth- or seventh-ranked driver out of eight main reasons manufacturers and retailers engage in CSR initiatives, respectively.

Click to enlarge. | Image credit: Ketchum/Carol Cone On Purpose

The research revealed that not only do manufacturers and retailers agree that purpose-driven initiatives are important to their companies today (98 and 94 percent, respectively), but also expect them to increase in importance over the next two years (93 percent for both). Both groups cited drivers linked to business growth as the top reasons sustainability efforts are integrated into operations, including enhanced corporate reputation, business results/return on investment (ROI), and staying competitive.

“The fact that corporate reputation and competitive advantage are ranked more highly than consumer expectation shows how well businesses understand the importance of these initiatives,” said Monica Marshall, SVP and director of Sustainability and Social Impact at Ketchum.

“Consumer-facing retailers and the manufacturers that supply them are aligned on the higher-level business drivers of these programs, but they also jointly recognize the lack of a universal approach to measuring the impact of such programs.”

Nearly half of those surveyed said ROI is too hard to measure (48 percent of manufacturers and 44 percent of retailers), while 7 in 10 manufacturers and 6 in 10 retailers said that gaining internal support for CSR initiatives is hindered by an inability to clearly demonstrate impact. Four in 10 retailers said it only makes sense to invest in initiatives if they deliver measureable ROI, despite that 64 percent of them agree that sustainability and social impact initiatives are critical for businesses looking to thrive in the long term.

While the CDP’s Global Supply Chain Report 2016, released in January, asserted that companies are blind to climate risks in half their supply chains, the Ketchum-CCOP study found that 81 percent of manufacturers and 73 percent of retailers acknowledge that environmental and social impact programs are a way to reduce risk. However, the latter also found that legal and regulatory experts are not typically responsible for setting CSR strategies; only 56 percent of retailers identified such personnel as drivers of strategy.

The survey included more than 250 senior leaders from the consumer durable goods sector in the U.S., U.K., Germany, mainland China, and South Korea. The results will be released soon in a report, Return On Purpose, from Ketchum Global Business and CCOP.

Hannah Furlong is an Editorial Assistant for Sustainable Brands, based in Canada. She is researching the circular economy as a Master's student in Sustainability Management at the University of Waterloo and holds a Bachelor's in Environment and Business Co-op. Hannah… [Read more about Hannah Furlong]

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